Foxconn ships 1.4 million iPhone 5Ss to China Mobile: WSJ

January 14, 2014 - 14:57 AMT

PanARMENIAN.Net - Apple's major iPhone assembler Foxconn has shipped about 1.4 million iPhone 5Ss to China Mobile last week, according to a person familiar with the matter, ahead of the mobile giant’s launch this Friday, Jan 17, the Wall Street Journal reports.

While the initial shipment volume doesn’t represent the total sales at China Mobile for January, the figure helps to gauge early demand for iPhones from China Mobile, the world’s biggest carrier by subscribers with more than 760 million customers. China Mobile began taking preorders for iPhones since Dec 25.

“Shipping one million or more iPhones to a single carrier per month is substantial. But we have limited visibility beyond this month as Apple hasn’t informed Foxconn of the volume for the next shipment to China Mobile,” the Journal quoted the person as saying.

Analysts have expected that the deal with China Mobile would help Apple sell an additional 10 million to 30 million iPhones this year. But a recent report from Wedge Partners said initial indications of new iPhone demand at China Mobile appear to be lower than other carriers. Both China Unicom and China Telecom have been offering the new iPhones since late September and have also begun offering promotions to maintain subscribers.

“Shipping one million or more iPhones to China Mobile every month would be significant to Apple as its average monthly iPhone sales in China is only about two million,” said Gartner analyst Sandy Shen.

According to Gartner, Apple sold 18.5 million iPhones in China in the first three quarters of 2013, up 28% from a year earlier. But the growth rate has slowed over the past few years partly due to intensifying competition.

Shen said while China Mobile will help boost Apple’s market share in China, the U.S. technology giant is facing rising challenges from other smartphone vendors in the saturated high-end segment.

In the third quarter of last year, Apple came in fifth with a market share of 6% in China, according to Canalys, behind Samsung’s 21%, Lenovo’s 13% and two Chinese companies Yulong and Huawei.

“We have seen fading enthusiasm for iPhones compared with the past few years as we have more choices in China now. There has been no dramatic change to the iPhone and consumers want a larger screen size,” said Shen, noting that other handset makers including Samsung, Sony and HTC all offer bigger screen smartphones.

Apple sold 33.8 million iPhones in the fourth fiscal quarter ended Sept 28, up 26% from the same period a year earlier.

Apart from China Mobile, Apple’s official stores in China and other resellers will also sell iPhones that support China Mobile’s new fourth-generation mobile network. It remains unclear how many 4G versions of China Mobile’s iPhones would be shipped to all distribution channels this month.

Foxconn manufactures most of the iPhones for Apple and since October it has reallocated a majority of its production capacity to meet the strong demand for the more expensive iPhone 5S.